Edible bean prices may surge this fall on tight supplies
July 30, 2013
by Laura Lloyd
MIAMI — Excessively wet weather in the Northern Midwest — especially North Dakota, Minnesota and Michigan — has hurt the condition of edible bean crops in the region and led to widespread nervousness in the industry that prices may soar on very tight supplies, said Vitto F. Campuzano, managing director at F. Garcia Wholesale and Export, Inc., in Medley, Fla.
In addition, Brazil, a large producer of edible beans, has experienced a poor year of production because of drought and may be forced to import supplies rather than perform its normal role as a net exporter. If that happens, Mr. Campuzano said, ‘beans could hit an all-time high” in the next few months. That would mean prices would exceed the previous record of $70 for a 100-lb bag that was reached in 2011.
He said talk has been circulating that Brazil has been making price inquiries in the United States and will be closely watching the crop as harvest approaches this fall. He said that if Brazil moves to buy sizeable amounts of U.S. edible beans — pinto beans because they resemble the country’s staple bean, the carioca — that would “turn the market upside down.”
Only in the West, in states such as Colorado, Wyoming, Nebraska, Idaho and Washington, are prospects solid for a favorable 2013 crop, Mr. Campuzano said.
“We have a situation of high demand and low supply and that means higher prices,” Mr. Campuzano said. He said that, as recently as May, a 100-lb bag of beans was about $38 wholesale but now is $50. “That’s in only six weeks,” he said. He added that carry-over from the 2012 crop is scant.
He said many U.S. growers “weren’t positioned correctly and didn’t plant enough acres” in 2013 to have big crops, given the poor weather that plagued the Upper Midwest earlier in the growing season. The U.S. Department of Agriculture in its June 28 Acreage report said, in the 18 main growing states, a total of 1,459,400 acres were planted to edible beans, down 16% from 1,742,500 acres planted to edible beans in 2012. The U.S.D.A. forecast 2013 harvested acres at 1,399,200 acres, down 17% from 2012 when 1,690,400 acres were harvested.
Adding yet another possible negative to the mix is the possibility that the crop in the Northern Midwest may experience damage from an early freeze in September or October, because harvest is likely to be on the late side because of the slow start in the spring.
“A lot of people are nervous,” he said.
Mr. Campuzano pointed out that pricing of edible beans such as pintos, black beans and red beans takes place in conversations between growers and processors because there is no futures market available for edible beans. Processors, in turn, sell their inventories to wholesalers and exporters. At any time, buyers may choose to contract their purchases or buy hand to mouth, depending on market conditions.
If, though, prices surge well above the contracted amount, processors are forced to pay the difference and they “could get crushed,” he said.
Mr. Campuzano’s company buys edible beans from U.S. producers and sells them to the domestic food service industry as well as customers, in Haiti, the Dominican Republic, Jamaica and Angola.